102 STAT. 3626 PUBLIC LAW 100-647—NOV. 10, 1988

"(B) if there is no such designation, the calendar year.
No period may be designated under subparagraph (A) unless the
same period is designated with respect to all other plans of the
employer of the same type. Any designation under subpara-
graph (A) may be changed only with the consent of the Sec-
retary/'

(C) Subsection (c) of section 4976 of the 1986 Code (as
added by title T) is amended—

(i) by striking out "any plan year" in paragraph (1)
and inserting in lieu thereof "any testing year (as
defined in section 890X13))"; and

(ii) by striking out "such plan year" each place it
appears in paragraph (2)(A) and inserting in lieu
thereof "such testing year".
(2) TIME FOR TESTING.—

(A) IN GENERAL.—Subsection (g) of section 89 is amended
by adding at the end thereof the following new paragraph:
"(6) TIME FOR TESTING.—

"(A) IN GENERAL.—Except as otherwise provided in this
paragraph, the determination of whether any plan is a
discriminatory employee benefit plan for any testing year
shall be made on the basis of the facts as of the testing day.
"(B) ADJUSTMENT WHERE BENEFIT OF HIGHLY COMPENSATED
EMPLOYEE CHANGES.—If the employer-provided benefit
(actually provided or made available) of a highly com-
pensated employee changes during the testing year by
reason of any change in the terms of the plan or the making
of an election by such employee, the amount taken into
account as such employee's employer-provided benefit shall
be adjusted to take into account such change and the
portion of the testing year during which the changed bene-
fit is provided (or made available).

"(C) TREATMENT OF NON-HIGHLY COMPENSATED EMPLOYEES
WHERE CHANGE IN PLAN.—Rules similar to the rules of
subparagraph (B) shall apply in the case of employees who
are not highly compensated employees and who are affected
by any change in the terms of the plan, except that the
determination of such employees' employer-provided bene-
fits (actually provided or made available) shall be deter-
mined as of the date after such change selected by the
employer and permitted under regulations prescribed by
the Secretary.

"(D) TESTING DAY.—For purposes of this paragraph, the
term 'testing day' means—

"(i) the day designated in the plan as the testing day
for purposes of this paragraph, or

"(ii) if there is no day so designated, the last day of
the testing year.
"(E) LIMITATIONS.—

"(i) DESIGNATION MUST BE CONSISTENT FOR ALL PLANS
OF SAME TYPE.—No day may be designated under
subparagraph (DXi) with respect to any plan unless the
same day is so designated with respect to all other
plans of the employer of the same type.

"(ii) DESIGNATION BINDING.—Any designation under
subparagraph (DXi) shall apply to the testing year for